How Can Distressed Communities Bounce Back?

According to The Hamilton Project at the Brookings Institution, the answer lies in a national economic strategy that targets the most economically troubled communities. In an effort to reverse years of economic decline in the nation’s most distressed communities, a recent study recommends a set of policies that attract new businesses, aid displaced workers, and match unemployed workers to new jobs.

The study looks at the long-term consequences communities face after experiencing sharp economic shocks. The communities hardest hit during periods of economic recession persistently lag far behind the rest of the nation in employment and income growth. They suffer from declining population, employment, wages, and home prices because of a systematic imbalance between the supply and skills of its workforce and the demand for their work from local businesses and industries. The study offers a three-pronged approach to address this problem of persistent distress:

1. Attract new businesses to these communities through a combination of tax incentives and expansions in public services and infrastructure investment,
2. Aid displaced workers through “wage insurance” programs and investments in job retraining, and
3. Match unemployed workers to new jobs by improving job search assistance and counseling services.